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Same sex de facto relationships

The laws relating to property settlement at the end of a same sex de facto relationship have recently changed. For relationships that have broken down since 1 March 2009, the Court now deals with all of the legal aspects of the separation, including any parenting agreement, property settlement and maintenance. As a result, parties to relationships that have broken down after 1 March 2009 may have more extensive entitlements than they would have had under state law.

The lawyers at Mathews Family Law & Mediation Specialists Melbourne understand the difficulties involved and the unique nature of individual relationships. We have extensive experience negotiating property settlements for couples who have a substantial asset pool, such as a major property/share portfolio or a family business. The process of a breakdown in a de facto relationship can be just as complex as divorce. We understand both the emotional and the commercial implications of splitting assets. We are committed to ensuring a fair settlement is achieved as quickly as possible, we aim to reduce the time taken and therefore the cost to you.

In addition to helping couples after a relationship breakdown, we can also provide advice to clients who may be considering entering into a de facto relationship and want to protect their assets and financial independence.

If you have recently ended a same sex couple relationship, or are considering entering into a same sex couple relationship and would like to know how these changes affect you, Mathews Family Law & Mediation Specialists is a leading family law firm in Australia, please contact us on +61 3 9804 7991 to speak with a family lawyer from our law firm today. You can also send through your enquiry online now and we will contact you shortly.

Three in the bed: You, your de facto, and the Family Court

When the Australian states referred their powers to legislate about the property of de facto couples (same sex and opposite sex) to the Commonwealth at the turn of the decade, the question of what constituted a de facto relationship under the new legislation became the subject of much debate and, consequently, litigation.

The lay understanding of the term “de facto” tends to assume that there is a single identifying factor or test: for example, you have to live together and both be on the lease, you have to be in a relationship for more than two years, or you have to declare your relationship to Centrelink or the ATO.

As is often the case, however, the legal reality of the situation is not so clear cut.

The definition of a “de facto relationship” can be found in section 4AA of the Family Law Act 1975 and in brief requires that:

1. parties to a relationship are not legally married to each other;
2. parties to a relationship are not related by family; and
3. having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

It is the word “circumstances” in this third point upon which the discussion turns. The legislation goes on to list a number of circumstances that may (but not necessarily) be of relevance:

1. the duration of the relationship;
2. the nature and extent of the parties’ common residence;
3. whether a sexual relationship exists;
4. the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties;
5. the ownership, use and acquisition of the parties’ property;
6. the degree of mutual commitment to a shared life;
7. whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
8. the care and support of children;
9. the reputation and public aspects of the relationship.

Having listed the above factors, however, the legislation goes on to specify that not one of them is a prerequisite for the Court finding that a de facto relationship exists: instead, the importance of each factor should be determined by the Court in the particular “circumstances” of the case.

The effect of these sections is to give the Court a wide ranging discretion to determine each situation as the judicial officer deems appropriate. Understandably, this causes consternation in our mutual clients who often struggle to determine whether or not their relationship should be considered a “de facto”, along with the legal, taxation and other ramifications that such a status brings.

It may seem to go against “common sense”, but recent de facto litigation has shown us that a de facto relationship can, based on the above, be found to exist where one (or both) parties to the relationship is already married to another person, where the parties do not and have not lived together, or even where there has not been any sexual intimacy between them.

While it continues to be an area of law that finds its basis in judicial discretion, the issue of classifying de facto relationships will present a potential minefield for parties and their legal and financial advisors. Armed with knowledge of these pitfalls, however, prudent practitioners will be in a position to ensure that these issues are addressed at a time when asset protection and planning remain an option, and certainly before the horse has bolted and the intimate details of the parties’ personal lives are aired before the Family Law Courts. Mathews Family Law is ready to provide expert family law advice, with specialist solicitors, parental rights lawyers, divorce and family law attorneys available to assist.

De Facto Relationships – The Details

In Australia, the law affords some protection to couples that have chosen not to get married, yet lead the life of a married couple, including same-sex relationships. Whether you chose not go get married out of convenience, or for religious reasons, you can take comfort in knowing that should you separate, you are entitled to similar protection under the law as if you were married.

It is worth noting that the rules regarding de facto relationships may vary slightly depending on the state or territory, so this article will focus on the federal law laid out in the Family Law Act of 1975.

A de facto relationship exists when two people are not legally married to each other, not related by family, and regarding the circumstances of their relationship, they carry on as a couple living together on a genuine domestic basis. In determining whether a de facto relationship exists, the court will look at a myriad of factors laid out in the Family Law Act, including:

• the duration of the relationship;
• the nature and extent of their common residence;
• whether a sexual relationship exists;
• the degree of financial dependence or interdependence, and any arrangements for financial support;
• the ownership, use and acquisition of their property;
• the degree of mutual commitment to a shared life;
• whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
• the care and support of children;
• the reputation and public aspects of the relationship.

In order to receive the benefits awarded to de facto relationships under The Family Law Act, the parties must have engaged in a de facto relationship for at least two years (except if there is a child of the relationship or one party made substantial financial contributions).

Recent Changes – Family Law Amendment Act 2008

The Family Law Amendment Act was given Royal Assent in November of 2008 and greatly impacts de facto couples. The amendment brought these relationships under the purview of the federal law and allows them to be treated the same as married couples. The major change brought about by the amendment is that the financial settlement regime was extended to both same sex and heterosexual de facto relationships.

The amendment allows parties to a de facto relationship to seek declaratory relief in relation to their relationship and property, seek maintenance orders, seek property adjustment orders, and the amendment allows de facto couples to enjoy superannuation splitting and financial agreements.

The amendment does not affect de facto couples whose date of separation came prior to March 1, 2009; those relationships are not subject to the laws of the federal system, and are limited to relief awarded under state and territory laws. The date of separation is the sole determining factor as to whether a de facto relationship is governed by state or federal law. Should your de facto relationship have ended prior to this 2009 date, there is one way you may still have access to the federal law. If you and your partner make an unconditional choice to opt in to the federal legislation, and you satisfy the following elements, your separation can fall under the purview of the federal law.

1. There must be no current order about property or maintenance.
2. There must be no agreement between the parties enforceable under the state law in existence.
3. The parties must consent in writing.
4. The parties must have received independent legal advice as to the advantages and disadvantages of making the choice.
5. The parties must have received a signed statement confirming the advice from their lawyer.

Generally, this exception is no longer applicable because The Family Law Act has placed a two-year limitation on the institution of matrimonial causes. So, had your de facto relationship ended before March 1, 2009, but no legal action was filed within two years then you would not be eligible for any relief.

Each of the following subsections highlights the relief available to de facto couples thanks to this 2008 amendment.

De Facto Relationships and Property Settlement

The Family Law Act makes little difference between property settlement amongst formerly married couples, and those who were in a de facto relationship. For all intents and purposes, the courts are to treat property settlement issues for married and de facto couples the same, and the language under the Family Law Act is nearly identical.

For an in depth analysis regarding property division, please see the articles in our property settlement centre. With regard to property settlement issues, just know that there is no real distinction between the way the law treats married couples and those who were in de facto relationships. The way that creditors, bankruptcy trustees, and property orders are treated is practically identical.

De Facto Relationships and Maintenance

Similar to property settlement issues, the way in which de facto relationships are treated with regard to maintenance is identical to the way in which married couples are treated. There are provisions in the Family Law Act that discuss the right to maintenance, power to order maintenance, factors to look at, urgent maintenance, and modification of orders that are almost verbatim for both married and de facto couples. You can find an analysis of all of the rules regarding maintenance in our maintenance center.

De Facto Relationships and Financial Agreements

As you may have guessed, the provisions of the Family Law Act that discuss financial arrangements for married couples is largely the same as the provisions that apply to de facto couples. Parties to a de facto relationship are permitted to enter into financial agreements; the only major distinction being that the agreement will be no longer be binding if a de facto couple later marries. Again, for a more detailed look at the law surrounding financial agreements, please see our property center.

De Facto Relationships and Superannuation

Superannuation splitting is available to de facto couples to the same extent that it is available to married couples. The only noteworthy distinction is that there are more complex provisions regarding the separation declaration for de facto couples than there are for married couples.

As you can see, thanks to the 2008 amendment, if you are involved in a legally recognised de facto relationship, and you subsequently separate, you are entitled to nearly the same relief you would be entitled to had you and your partner married.

De Facto Relationships – The Basics

A de facto relationship exists where two people, who are neither married nor related to each other, live together on a genuine domestic basis and includes same-sex relationships.

In determining whether a de facto relationship truly exists, the court will consider several factors, including but not limited to: the duration of the relationship, whether a sexual relationship exists, the degree of financial support, and your reputation and public aspects of your relationship. If you have engaged in a de facto relationship for at least two years, you are entitled to similar relief upon separation that you would be entitled to if you had chosen to marry.

In 2008 major changes were made with regard to the way the law treats de facto couples that subsequently separate. Now, de facto relationships fall under the purview of the federal law and are discussed in The Family Law Act of 1975. The 2008 amendment basically allowed for de facto couples to be entitled to nearly identical relief as married couples in terms of property settlement, maintenance, and financial agreements.

The bottom line is that the law awards some protection for de facto couples even though you and your partner chose not to get married. If you were party to a de facto relationship and have since separated, be sure to contact your lawyer and learn about the types of relief that are available to you.

Child Custody – The Details

By its very nature, separation and divorce is difficult, emotionally draining, and have a major impact on your life. However, if you have children, this emotional toll is only amplified. Your children may experience a lot of pain as you and your spouse or partner separate and they adjust to a new lifestyle of splitting their time with you and sleeping in two different homes. Because divorce is so hard for children to cope with, the Australian legislature has placed an emphasis on shared parenting and ensuring that both parents continue to play an active role in the lives of their children after separation.

2006 Changes

The largest contributor to this concept of shared parental responsibility came in 2006 in the form of an amendment to the Family Law Act 1975. When passed, this amendment brought about the most significant change to family law in more than thirty years. The main objective of the amendment was to both support and promote the practice of shared parenting and urge parents to reach an agreement with regard to parenting arrangements on their own, without the interference of the courts.

An explanatory memorandum that accompanied the amendment further expressed that the changes were intended to “represent a generational change in family law and aim to bring about a cultural shift in how family separation is managed: away from litigation and towards co-operative parenting.” Through this amendment, Australia took a significant step towards making divorce easier on children.

Not only did the amendment express a desire for parents to reach an agreement on their own, but it also stressed the importance of both parents continuing to take an active role in the parenting of the child. The amendment expresses a desire for parents to jointly share duties and responsibilities, and also for children to be cared for and spend time with both parents.

While this article is designed to give you an in-depth look at how parenting arrangements work, through litigation or otherwise, bear in mind that often the most ideal way to settle a difference is to reach an agreement without involving the court. Children benefit from having both parents involved in their lives, so the best thing you can do for your child is to reach an agreement where each parent has meaningful involvement, and refrain from having your parenting issues heard in court.

Shared Parental Responsibility

The term “parental responsibility” is defined in the Family Law Act as: “all the duties, powers, responsibilities and authority which, by law, parents have in relation to children.” This has been understood to mean that parental responsibility encompasses living arrangements, medical treatment, education, religious upbringing, protection from harm, and the responsibility to keep the child safe among other things.

You may be wondering, what exactly did the legislature mean when it expressed a preference for shared parental responsibility? Does that mean the child should spend equal time with each parent? Should each parent spend equal money on the child? Should each be allowed to make decisions about the child’s religion, schooling, and extra-curricular activities? Generally speaking, the answer is yes.

Australia’s preference for shared parental responsibility means that both parents should have involvement in the child’s life, make decisions with regard to the child’s upbringing, and contribute to the general welfare and needs of the child. The courts will not allocate or assign responsibilities unless disputes arise that the parents are unable to resolve. Furthermore, should a court order be silent with regard to parental responsibility, both parents are to retain the responsibility.

As you can see, Australia has a strong preference for parents to share in the upbringing of the child, despite separation or divorce, and the courts are reluctant to make decisions regarding specific parental responsibilities. The Amendment discussed above in fact created a rebuttable presumption that it is in the best interest of the child to have both parents share equally in their responsibility, care, and upbringing.

It should not come as a surprise that very rarely do the courts take action to limit the parental responsibility of a parent, it takes extreme circumstances affecting the welfare of the child for the court to intervene and do such. Specifically, the rebuttable presumption discussed above is only abandoned where there is a threat of abuse, violence, or if allowing the parent to have control over the child is contrary to the child’s best interests.

Equal Time

Sometimes the concept of shared parental responsibility can be difficult when it comes to how much time the child spends with each parent. Equal time is often harder to organize than equal responsibility with regard to general decision-making, education, and religion. Allowing each parent to have equal time can raise logistical issues, which the court has addressed.

While there is a rebuttable presumption that equal shared parental responsibility is in the best interest of the child, there is no presumption with regard to the amount of time each parent has with the child. Before the court will issue an order allowing for equal time to be shared by the parents, it must first determine that such an arrangement is in the child’s best interest and reasonably practical.

There are advantages and disadvantages to allowing your child to spend equal time with you and your former spouse or partner. Each child is different and will respond differently to a divorce, and should you need a court order determining custody, the court will consider both the child’s interests as well as whether splitting time equally is reasonably practical. When determining whether equal time is reasonably practical the court will consider the following factors:

• how far apart the parents live to form each other
• the parent’s current and future capacity to implement an arrangement for the child to spend equal time, or substantial and significant time, with each of the parents
• the parent’s current and future capacity to communicate with each other and resolve difficulties that might arise in implementing an arrangement of that kind
• the impact that an arrangement of that kind would have on the child
• such other matters as the court consider relevant

As you may have guessed, courts rarely grant parenting orders allowing for equal time. While the best interest of the child is paramount to the court’s decision, it also considers the practicability of the order, and more often than not equal time is not found to be reasonably practicable.

Day-to-Day Decisions

Generally speaking, the parent who has the child in their care is responsible for the day-to-day decisions – like what the child eats, wears, when the child goes to bed, and what activities the child does. These day-to-day decisions can be made unilaterally, without consulting the other parent. However, the big decisions, otherwise known as “major long-term issues” are to be decided by both parents. The Family Law Act has enumerated certain issues that fall into the major long-term category, they include but are not limited to: education, religion/cultural upbringing, health, name, and living arrangements.

What happens first?

We have discussed how Australia’s preference for shared parental responsibility and for settling matters without litigation, so you may be wondering how the process works, and what happens first? This article will discuss the non-litigious ways to reach an agreement before discussing how parenting litigation works.

Step one to reaching a parenting agreement is to participate in something called family dispute resolution (otherwise known as alternative dispute resolution). All courts require compliance with primary dispute resolution, and you must obtain a certificate from a family dispute resolution practitioner prior to filing for a parenting order. The purpose of required family dispute resolution is to encourage early and full disclosure of relevant information, and allow parties to engage in a process that not only avoids legal action but also minimizes cost.

While participating in family dispute resolution, the focus of the parties is to be upon the best interest of the child, and parties should be open to negotiation, arbitration, and counseling.

Unless you can show good reason for not having followed the family dispute resolution requirement, non-compliance can result in serious cost consequences. There are only several exceptions to this requirement that excuse you from having to file a certificate from a family dispute resolution practitioner. The major exception is where the court finds that there has been or is a risk of abuse or family violence of the child. While there are several other exceptions, keep in mind that should you fail to comply with this requirement, it could cost you.

Family Relationship Centers and Family Advice Line

As part of the push to get families to reach agreements with regard to parenting issues without resorting to litigation, the government introduced both Family Relationship Centers and a Family Relationship Advice Line. Both programs are government sanctioned and designed to encourage parties to resolve disputes and enter into parenting plans.

The purpose of the Family Relationship Centers (FRCs) is to allow parents to reach workable arrangements for their children with the help of FRC staff. The staff members are not only trained in how to give advice concerning disputes but also are trained in identifying issues of family violence and abuse. Furthermore, while the staff does not administer legal advice, it has the ability to place parties in communication with Legal Aid and private practitioners to obtain the legal advice they need.

The Family Advice Line is available from 8 am to 8 pm Monday through Friday, 10 am to 4 pm on Saturdays and can be reached at 1800 050 321. Not only is this service available to the parents, but also is available for grandparents, stepparents, children and friends.

The purpose of the Family Advice Line is to provide information about the family law system, separation, how to maintain relationships, and the impact of conflict on children among other things. This service is free, and may remain anonymous should you choose to keep your identity unknown.

Other Methods of Dispute Resolution

Mediation is another type of dispute resolution that doesn’t involve the courts. The benefits to choosing mediation are that it can be less expensive than litigation, your case can be heard sooner than it could in Family Court, and the parties have greater control over the process.

Collaborative law is another option for dispute resolution and allows for parties and lawyers to meet in four-way meetings. This allows the parties to stay directly involved in the communication and negotiations. A major distinction with collaborative law is that the parties and lawyers agree in advance not to go to court.

Parenting Orders

After you have attended mandatory family dispute resolution and come to an agreement, you may apply to the court for a parenting order. Any person concerned with the child’s welfare may submit an application for a parenting order however in most cases, it is a parent, the child, or a grandparent who is seeking such an order.

With regard to parenting orders, the emphasis is on the best interest of the child. The court considers this to be the “paramount principle.” The primary considerations viewed by the court are allowing the child to have a meaningful relationship with both parents and also to protect the child from violence, abuse, and/or neglect. The court will also give consideration to a myriad of other factors, including the events that have occurred since separation.

After considering all relevant factors, the court can issue a parenting order that discusses parental responsibility, with whom the child will live, how much time the child spends with each parent, and how much communication the child has with each parent.

If you would like to modify a parenting order after it has been issued, you should first seek the assistance of a lawyer. Only if you are still unable to reach an agreement should you apply to the court for further help. At this point, the court can order both parents to attend a parenting program, or it can consider varying the order.

Non-Compliance and Parenting Orders

You should avoid breaching a parenting order at all costs; the court takes breaches of its orders very seriously and you could even potentially face goal time upon breach.

Australia has adopted a three-stage approach designed to both educate parents as well as impose sanctions when noncompliance occurs. Stage one addresses educating the parents about the nature and effect of parenting orders. Stage two is invoked upon the first breach of a parenting order, and requires the breaching party to attend an approved parenting course. When there are subsequent breaches, stage three permits the court to impose serious sanctions such as fines or imprisonment.

Parenting Plan

A parenting plan is a written document discussing any agreements reached between parties with regard to matters affecting their children. They differ from parenting orders in that they do not require the court’s involvement; they are simply informal agreements reached by the parties.

A parenting plan should detail the responsibilities and rights of both parents and its aim should be to create an arrangement in the best interest of the child. A parenting plan should include a breakdown of time that each parent is to spend with the child, discuss where the child will spend holidays, payments for the child’s expenses, and any other aspect of the care, welfare or development of the child.

The court will refuse to grant a divorce order unless it is satisfied that proper parenting arrangements are in place, and if the parties are unable to provide a plan the court will do it for them.

While it is permissible (and usually recommended) that parents agree to a parenting plan on their own, should this not be an option in your situation then you can resort to the other methods of dispute resolution we have discussed.

It is possible to have both a valid parenting plan and a valid parenting order. Typically, this situation arises when the order discusses significant topics (such as where the child will live) while the parenting plan manages the more intricate issues (for instance, how the child should be disciplined).

A major distinction between a parenting plan and a parenting order is that a parenting plan is not enforceable; it cannot be registered by the court and parties in breach of a parenting plan are not subject to the same sanctions as parties breaching a parenting order. For further discussion addressing the differences between a parenting plan and a parenting order, please see our FAQ that tackles this issue.

Independent Children’s Lawyer

In some cases, it is necessary to appoint an independent child’s lawyer (ICL) to represent the child’s interest. Parties can request this, or the court may appoint an ICL on its own initiative. In determining whether this appointment is necessary the court will consider a myriad of factors, including but not limited to: allegations of child abuse, a conflict between parties, issues of cultural or religious differences, sexual preferences of the parties, mental illness, and the proposed separation of siblings.

The role of the ICL is not to be the child’s legal representative, but rather to act as an “honest broker” throughout the legal proceedings. An ICL is charged with the task of forming an independent view of the evidence and acting in the best interest of the child. The presence of an ICL should minimize the trauma to the child and facilitate an agreed resolution of matters in the best interest of the child.

Any information that a child shares with an ICL is deemed to be confidential unless the ICL considers disclosure to be in the best interest of the child.

What the Child Wants 

Undoubtedly a child will form an opinion about where they want to live and whom they want to live with throughout your separation and divorce. A frequent question that arises is whether the child’s wishes are considered when determining custody arrangements.

A child is not required to disclose their wishes, however the court is required to consider their views should they choose to express them. The court will balance the child’s view with their age and degree of maturity before determining how much credibility to give the child.

Court Proceedings

It is clear that the preference in Australia is for parties to reach agreements with regard to parenting and custody issues without involving the court. However, this is not ideal in every situation. Some separations and divorces are particularly contentious, some involve issues of violence, and other times the parties simply can’t reach an agreement using dispute resolution. Should that happen, there are certain rules in place to protect children if their parents end up litigating child-related issues

The court takes on several principle roles when it comes to child-related proceedings. First, during the proceedings, the court is to consider both the needs of the child and the impact that the proceedings may have on the child. Essentially, the court’s role is to minimize any trauma experienced by the child throughout the proceedings. The court is charged with actively directing, controlling and managing the conduct of the proceedings. Additionally, the court is to conduct proceedings in a manner that will protect the child from violence or abuse, promote cooperative child-focused parenting, and reduce delays, formality, and legal technicality.

Additionally, there are certain logistical things the court can do to help protect the child. For instance, the court is required to address as many irrelevant issues as possible on one occasion, which shortens the overall proceedings and lessens the impact on the child. Also, the court may schedule hearing dates close to each other so that the child will not be impacted by lengthy times between hearing dates. The court can also limit the number of witnesses used, and the technology used, and again, encourage the parties to use dispute resolution services.

Another question that often arises when parties must litigate matters concerns the evidence that may be shown. The most common types of evidence are as follows:

• application and affidavit of the parties
• expert affidavit
• oral evidence (testimony)
• testimony/reports from an independent children’s lawyer
• family consultant’s report

While litigation is certainly an option for parties dealing with custody issues, it is clear that the preference is for parents to reach an amicable agreement by way of a parenting agreement or a parenting order achieved through dispute resolution.

Maintenance in Same Sex Relationships

Partners in a same sex couples can now be compelled to pay maintenance to the other partner after separation under the same provisions that apply to separated married couples.

One difference for same sex couple maintenance order is that it will automatically end if the party receiving maintenance marries. In the case of the receiving party entering into a de facto relationship, the paying party can apply to have the order set aside.

De facto relationships

The laws relating to property settlement at the end of a de facto (including gay or lesbian de facto relationship – see Same sex couples) have recently changed. For relationships that have broken down since 1 March 2009, the Court now deals with all of the legal aspects of the separation, including any parenting agreement, property settlement and maintenance. As a result, parties to relationships that have broken down after 1 March 2009 may have more extensive entitlements and obligations than they would have had under State law.

The lawyers at Mathews Family Law & Mediation Specialists Melbourne understand the difficulties involved and the unique nature of individual relationships. We have extensive experience negotiating property settlements for couples who have a substantial asset pool, such as a major property/share portfolio or a family business. The process of a breakdown in a de facto relationship can be just as complex as divorce. We understand both the emotional and the commercial implications of splitting assets. We are committed to ensuring a fair settlement is achieved as quickly as possible, we aim to reduce the time taken and therefore the cost to you.

In addition to helping couples after a relationship breakdown, we can also provide advice to clients who may be considering entering into a de facto relationship and want to protect their assets and financial independence.

De Facto Couples

Many couples today are in committed relationships that are not legally recognised as marriages in Australia. Some opposite sex couples choose not to marry for reasons of conscience or religion. In the case of same-sex couples, the law does not (yet) permit marriage. But the law grants these de facto couples virtually all of the same rights – and responsibilities – as legally married couples. These include laws on division of property, maintenance, child custody and child support.

What relationships can be regulated by financial agreements?

Financial Agreements can regulate financial arrangements between married couples, de facto couples and same sex couples.

Vanessa Mathews interviewed – Gay Marriage?

Vanessa Mathews was asked by The Age what impact she thought the legalization of gay marriage would have on family lawyers?
Click here to read the article http://www.theage.com.au/lifestyle/weddings/gay-marriage-expected-to-be-boost-for-wedding-business-20150601-ghebgd.html

Click here to read more information about same sex de facto relationships: https://mathewsfamilylaw.com.au/samesex/

Superannuation in Property Division

When a couple separates or divorces, or a de facto relationship[i] ends, a property must be divided. The property includes all of the assets – houses, cars, jewelry, furniture – and all of the liabilities, like loans and mortgages.  Superannuation – the money individuals set aside to have when they retire – is now also included in those assets that need to be divided fairly between a couple, whether married, de facto heterosexual or de facto same sex.  In the past, superannuation was considered a financial resource, similar to salary or other income. Today, however, most couples weigh superannuation funds as if they are marital assets or property.

Part VIIIB of the Family Law Act, 1975 (FLA) covers issues dealing with superannuation and families. The law requires that the superannuation benefits due to one spouse or de facto partner must be divided with the other spouse or partner. But there are several difficulties with dividing superannuation. Firstly, if a couple divorces before retirement, the superannuation funds are not yet available. So while a couple may divide up their property at the age of 45, they may not see funds from superannuation for another 20 or 30 years.  Other problems…..

The law recognizes these problems and offers three ways a divorcing couple can divide superannuation interests.

1. “Split”.  The first method is to split the interest into two accounts or benefits. This can be done either by a payment split when the superannuation becomes due (say, at retirement) or through an interesting split, which means each partner receives a superannuation interest. With an interesting split, the partner receiving the new benefit can keep the money in the original account until it comes due, or open an entirely new account. Nobody receives an actual cash payment – the money remains in a superannuation fund.  Tax issues must be calculated before the payment or interest is split.
2. “Flag”.  The second approach to dividing superannuation is to flag the benefit for a later date. In this scenario, the couple marks the benefit and the trustee of the superannuation fund is not allowed to touch it until the “flag” is lifted, either by agreement of the parties or with a court order.  The couple can then decide what happens to the fund only later after the person who owns the superannuation account retires.
3. Leave it alone.  In this case, couples consider superannuation a financial resource. When dividing up their assets, superannuation is only included in the calculation as a source of income, not as an asset.

Splitting the Superannuation Now

Typically, divorcing couples split their superannuation. Most couples choose this approach because it enables them to know exactly how much money they are receiving and allows them to make a clean break, without having to return to financial issues ten, twenty or thirty years later.

There are several steps needed to split the superannuation:

Step 1:  Request information from the partner’s superannuation fund.  

 There are two forms that a spouse must submit to the trustee of the superannuation fund:

1. Form 6 Declaration, which proves to the trustee that you are entitled to see the information and
2. the Superannuation Information Request Form. These forms can be obtained online

You must be “eligible” to receive the information from the fund.  An eligible person is:

1. The member of the fund or
2. The spouse of the member of the fund or
3. If (1) or (2) died, the deceased person’s legal representative or
4. Someone who plans to enter into a superannuation agreement with the member

Step 2: Evaluating information from the superannuation fund.  

The law requires the fund to provide information to the member of the fund and his or her spouse. The fund may provide information regarding the value of the superannuation or information that helps the person requesting information determine the value of the fund. The trustee should also notify the requester whether or not the fund may be split.  Once this information is obtained, the numbers must be calculated using specific formulas, depending on the type of fund. An expert in family law or accounting can help determine the correct formula to use in order to obtain the correct amount of interest each party is entitled to from the superannuation.

Step 3:  Turn to the courts for an order.   

Couples may sign their own splitting agreement and take it directly to the trustee of the superannuation fund. Alternatively, couples can turn to the courts with their own financial agreement already signed. Finally, if a couple can’t agree, they may obtain a court order.

1. If both sides agree about the value of the fund and it’s division, they can submit an Application for Consent Orders, which includes their agreement regarding superannuation. This agreement is binding only if both parties signed it AND both received independent legal advice.  This is the case regarding all financial agreements between couples divorcing.
   

   De facto couples terminating their relationship may also submit a financial agreement regarding superannuation, but only if they were residents of New South Wales, Victoria, Queensland, South Australia, Tasmania, the Australian Capital Territory, the Northern Territory or Norfolk Island when the agreement was made.

2. If the parties cannot come to their own agreement, they may turn to the court for Orders.

In either case, the trustee of the fund must be notified that the court is being asked to give orders. This is to ensure that the request being made complies with the fund’s rules. Also, the trustee is entitled to attend the court hearing and oppose the orders.

Step 4: Send a copy of the agreement or court order to the superfund trustee. 

Once the court gives orders, the superannuation fund must be sent a sealed copy of the decision.

Step 5: Split the superannuation benefit. 

Generally, the superannuation benefit will be split into two funds, one for each partner. There may be administrative costs for splitting the fund.

Contact Mathews Family Law to speak with one of our specialist solicitors and family law property lawyers to discuss your superannuation split today. Call our office on 03 9804 7991 and book a consultation with a divorce and family law attorney.

[i] Laws on the splitting of superannuation do not apply to de facto couples from Western Australia.